You hear a saying "In order to find out how much cash a company is generating, you have to look at the net profit in the income statement." You know that, in fact, the cash a company generates and the profits it earns during a period are not the same. a. Why are the cash a company generates and the profits it earns during a period different?

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Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.